Policy
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Making Money Lawful
“In terms of incentives, politicians can’t meddle, and central bankers can’t distribute unnecessary largesse, if monetary policy is constrained by a rule. Given that the Fed exists, and isn’t going anywhere soon, the best course of action is to ditch the ‘discretion’ part of ‘constrained discretion.'” ~ Alexander W. Salter
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A Keynesian Path Would Be the Wrong Path for the U.S. Economy
“Following a crisis, countries with higher levels of economic freedom–that is, with institutions closer to those proposed by Hayek than Keynes–suffered smaller economic contractions and faster recoveries. Keynesian ideas have dominated the political worldview for decades. But we would be better off following Hayek.” ~ Nicolás Cachanosky
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The Fed Is Not Independent, But It Should Be
“To be an effective central bank, the Fed must strive to remain independent of short-term political influence. A strict separation of monetary and fiscal policies helps bolster central bank independence.” ~ Thomas L. Hogan
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Soaring Unemployment Benefits Will Delay Recovery
Policymaking is not easy. And policymaking in a pandemic is harder still. The CARES Act is a huge expenditure package. Some of it is likely to promote a speedy recovery. But some of it will drag the recession out unnecessarily.
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Are Financial Crises Driven By Supply Or Demand Shocks?
In a new NBER working paper, Felipe Benguria and Alan M. Taylor consider whether financial crises usually stem from the demand or supply side of the market.
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Cost-of-Living Adjustment Likely to Be Small
Retirees are likely to see a positive but very small cost-of-living adjustment in their Social Security benefits next year.
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Reforming Social Security
Since its enactment in 1935, Social Security has become an important feature of the retirement landscape for all Americans. But its finances are in need of repair. Despite the significant taxes already paid into the Social Security system, future benefit payments are expected to both outrun future tax revenues and consume any accumulated surplus (Chart…
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Expect No Cost-of-Living Adjustment to Social Security in 2016
The annual cost-of-living adjustment (COLA) will be announced on Oct. 15, when the last data required to compute it becomes available. But the data already suggest that prices have fallen over the past 12 months, removing the need for an adjustment. If prices have fallen but the COLA is zero, the purchasing power of Social…
